RIM's CEO tandem: Portrait of pathetic
Research in Motion's two CEOs have to go. The company has lost investor---and increasingly customer---confidence over the last year, its latest greatest savior OS is behind schedule, the PlayBook is a disaster and RIM could be circling the porcelain rim if it isn't careful.
Worth every penny
Nevertheless, RIM carries on with its current management. Co-CEOs James Balsillie and Mike Lazaridis are taking $1 in salary a year. This token gesture inspires instant cynicism. The two may only be worth $1 a year at this point. You get what you pay for.
RIM's earnings conference call after a disappointing fourth quarter outlook was another romp through bizarro world. In this world, RIM is always on the cusp of a massive transformation and a product home run. If you've been paying attention you already know the punchline. RIM strikes out more than the Phillies' Ryan Howard in a playoff series.
Also: RIM's Q4 outlook: BlackBerry shipment projections tank | RIM expected to cut BlackBerry sales targets | RIM CEOs respond about poor U.S. sales, BlackBerry 10 delay | CNET: Want a BlackBerry 10 phone? Don't hold your breath
But why listen to me. Let's have RIM's dynamic duo tell the story in their own words.
Balsillie:
The last few quarters have been some of the most trying in the recent history of this Company. As you know, we are in the process of completing the largest platform and organizational transition in the Company's history, and while we have remained a solidly profitable -- remain solidly profitable and delivered significant unit volume during this transition, we recognize that our shareholders may feel we have fallen short, in terms of product execution, market share, and financial performance. That being said, we continue to believe that our transition will better position us to deliver enhanced value to shareholders, and enhance our leading position in the mobile communication space. It is important for you to know that Mike and I, as two of RIM's largest shareholders, understand investor sentiment, and we are more committed than ever, to addressing the issues at hand.
To further demonstrate our passion, alignment and commitment to RIM's long-term success, both Mike and I have asked the compensation committee to make a change to our cash compensation, such that our salaries will be reduced to $1.00 per year, effective immediately.
Translation: Hopefully this weak board of ours will keep us around. Here's a token salary cut for keeping us around.
From there, Balsillie talks about launching new devices and tablets as evaluating products, operations and manufacturing. In other words, hang on folks RIM will get this right sometime.
Balsillie continues:
We are leaving no stone unturned, and are evaluating a number of areas including product management and the number of SKUs offered, supplychain and bill of material cost efficiency, marketing and advertising, partnership and licensing opportunities, organizational and management structure, opportunities to leverage the BlackBerry infrastructure. While the proposed transformation may take some time, we believe that the steps we are taking will improve our performance, and better enable us to deliver on what we expect of ourselves, what our stakeholders want us to achieve, and what the 75 million loyal and passionate BlackBerry subscribers expect from us.
Translation: Yes folks, we think we still have a lot of times.
And there's more. Balsillie continues:
RIM's US business is particularly weak, and the positive trends we are seeing in several markets around the world including the UK, France, South Africa, Mexico and Argentina are being offset by high churn, and decreasing subscriber base in the United States.We are not satisfied with the performance of the business in the United States. In order to drive increasing demand for BlackBerry products and services in this key market, we are planning to undertake a comprehensive advertising and promotional program in 2012.This is expected to have an impact on earnings, as we invest to maintain and grow the BlackBerry brand and awareness in the high-performance BlackBerry 7 product family.
Translation: We have to cut prices because the U.S. isn't sold on our products. We'll market our way out of this mess. Yeah, that sounds good right Mikey?
After a thousand more words of babble, Balsillie hands the mike to his other half. Lazaridis is just as delusional but from an engineering perspective.
Lazaridis says:
We are committed to the BlackBerry PlayBook, and it's an important aspect of our longer term smartphone and mobile computing strategy. While we would have preferred the initial launch to have been smoother, I firmly believe that the BlackBerry PlayBook tablet remains the most secure and most advanced tablet platform on the market today, with true, real-time multi-tasking, flash-enabled browsing, uncompromised video streaming for both HTML 5 and flash video, which constitutes the majority of premium video content on the internet today, as well as a flexible platform based on open standards. These attributes will be further enhanced by the PlayBook 2.0 software when it becomes available.
The competitive dynamics of the tablet market are shifting rapidly, with a number of new entrants and pricing moves in the industry. As we await the launch of PlayBook 2.0, we expect to continue to run promotions to stimulate the market for PlayBook, both in the enterprise and consumer segments. While all PlayBook users will benefit from the new PlayBook 2.0 features such as native e-mail, contacts and calendar integration and the Android player, enterprise customers will benefit even further. New enterprise-focused features include enhanced device manageability, enterprise application deployment, and BlackBerry Balance.
Translation: We're going to lose money on every PlayBook we sell. You could argue I should be committed for being committed to that turd tablet. And yes we expect RIM customers to wait indefinitely until we figure out this native email thing.
Lazaridis then talks about why the latest superphones on BlackBerry 10 will be delayed.
We need a highly integrated dual core LTE platform.The processor we selected offers industry-leading power and efficiency, and also allows us to deliver the industrial design, that we believe is critical to the success in this market segment.This chipset will not be available until mid 2012. And as a result of this and certain other factors, we now expect our first BlackBerry 10 smartphones to reach markets in the latter part of calendar 2012. In the meantime, we believe that our strong BlackBerry 7 portfolio will continue to drive adoption of BlackBerry around the world.
Translation: The superphone is right around the corner. Really it is.
After a series of semi-painful questions Lazaridis says:
This is absolutely, not business as usual at RIM. We are going to do what it takes to get the value for shareholders and the Company, and we are totally redoubling our efforts on execution here.
Translation: I sort of have to say that if I'm going to keep this gig.
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